Panama and Japan's JICA Sign Loan Agreement for Line 3 Monorail Project
Panama secures $1.1B JICA loan for Metro Line 3 monorail project, accelerating infrastructure development and urban connectivity by 2028.
Recently, Panama signed a loan agreement worth ¥159.5 billion (approximately US$1.1 billion) with the Japan International Cooperation Agency (JICA) to support the completion of the straddle-type monorail project for Metro Line 3. The agreement was signed by Panama’s Minister of Economy and Finance, Felipe Chapman, and JICA Panama Office Chief Representative Shohei Tada, with Japanese Ambassador to Panama Kazuyoshi Matsunaga and Panama Metro General Manager César Pinzón witnessing the ceremony. This marks the third loan agreement signed by JICA to fund Line 3’s construction.
Key Terms:
Interest Rate: Tokyo Term Risk-Free Rate (TORF) minus 100 basis points.
Loan Period: 20 years, with a 6-year grace period.
Project Overview:
Panama Metro Line 3, a 25-kilometer straddle-type monorail system, will stretch from Albrook Station to Ciudad Futura Station, with commercial operations set to begin in December 2028.
Loan Utilization:
JICA specified the funds will be allocated to:
• Procurement of the straddle-type monorail system.
• Construction of a 5-kilometer tunnel under the Panama Canal, a 20-kilometer elevated section between Pacific Station and Ciudad Futura Station, and procurement of non-monorail equipment.
• Tunnel section consulting services, including basic design review, detailed design review, and construction supervision.
Context:
While Panama recently drew global media attention for its withdrawal from the Belt and Road Initiative and challenges facing the Panama Canal, the country remains a key infrastructure hub in Central America. Panama City alone has plans for eight urban rail lines, reflecting its substantial demand for infrastructure development and foreign financing partnerships. This project underscores Panama’s commitment to modernizing its transport network and leveraging international cooperation to meet growing urban mobility needs.
Pic:pixabay
